A cynical commentary about developments in the South African financial markets and the incomprehensible activities and pronouncements of bureaucrats and politicians.

Friday, 29 August 2014

PAY BACK THE MONEY

For a moment it felt as if August might
actually see the appearance of a large and fierce bear. However, the All Share
will close today probably only half a percent down on the month. Most of the
damage was caused by the platinum mines and the so-called mining houses.
Investors are alarmed by the clear signs that most of these enterprises are
arranging their affairs to minimise the often lethal and frequently energy-sapping
effects of South African state interference in their industry. On the bull side,
the telecommunication sectors, both fixed line and mobile, enjoyed a wonderful
month. The banks largely survived the obliteration of one of their number.
Bears will just have to wait some more.

For all
the apparent domestic problems in that land it seems as if the rest of the
world is regaining confidence in the idea that the USA offers a safe haven for their
money. The dollar is at a one year high against the euro, the yield on the US 10 year bond is sliding ever lower also to a one year record. Wall Street indices are sniffing
all time highs. Money is obviously
being sent out West
as extremism and intolerance sweeps the planet.

After all, what can be wrong with a
nation whose president spends so much time on the golf course and where the
national pastime would seem to be emptying buckets of icy water over each
other? Americans clearly have very little to worry about.

A bunch of MPs behaved rather badly in
the National Assembly last week and the Speaker has written them each a letter
inviting them to explain why they should not be suspended. Surely Madam Speaker
has no illusions about what sort of replies she will receive and indeed already
threats of court action are flying about. The next stage apparently is that an
investigation will be mounted. It is all rather wonderfully courteous and old
world. Possibly even colonial. Horrors.

The irony of the whole mess is delightful
and endless. The chant of “Pay back the money.” has quickly become a mantra
with widespread application. President Zuma missed a trick when he should have
used it back against the leader of the noisy bunch who himself is reportedly
catching up with his tax shortfall by making regular payments which, puzzlingly,
are considerably greater than his monthly parliamentarian’s salary. So far, no
one has yet used the phrase against the Chief of the Defence Force General Solly
Shoke, who rather understandably failed to resist the temptation of booking
himself into one of the ultra luxurious first class cabins aboard a flight to
the Far East. After all if the airlines offer
these facilities who else but high ranking government employees can afford to
use them? And it was a terribly important meeting he was going to.

The big problem with that sort of
consumption expenditure though, is that not even the most skilled spokesman can
convert it into that universal currency of “jobs created”. Here in the kingdom,
a proposal to place a 10% levy on the tourism industry was expressed in units
of job creation in order to fend off criticism. The money will apparently be
used to fund a project of enticing and inviting grand and prestigious events to
use this eastern coast as a venue. The idea has all the hallmarks of
bureaucratic ignorance of how the real world works.

By some sleight of hand, Stats SA
produced the positive second quarter growth rate result that was needed to
avoid the first half of 2014 being declared an official recession. Like the
‘bokke results against Argentina
it was not a pretty thing but enabled the responsible officials to preen a
little and claim that the things will improve “going forward”. However, that ODI win by the Proteas over Australia
was highly satisfactory.